System and method payment allocation and processing of bankruptcy claims

ABSTRACT

A system and method provides electronic management and processing of bankruptcy-related claims and payments. The method includes receiving loan servicer data from a loan servicer portfolio. The method also includes receiving trustee data from a repository of trustee information. The method includes comparing one or more data fields related to the claims from the service provider data to corresponding one or more data fields related to the claims from the trustee data and assigning a score to the comparison results for the data fields related to the claims based on one or more business rules. The method includes calculating the total score for the comparison results for the claims, designating the claim as being valid if the total score for the claim is greater or equal to a predetermined value, and designating the claim as being invalid if the total score for the claim is less than a predetermined value.

CROSS-REFERENCE TO RELATED APPLICATIONS

This Continuation patent application claims priority to U.S. patentapplication Ser. No. 11/852,086, filed on Sep. 7, 2007, which isincorporated herein by reference.

FIELD OF THE INVENTION

The invention relates generally to bankruptcy related loans, claims andpayments, and more specifically to a system and method for managementand processing of bankruptcy related loans, claims and payments.

BACKGROUND

To obtain a loan from a lender, a borrower executes a loan agreement anda security instrument that often secures collateral such as automobile,real estate or improvements the borrower purchased with the fundsobtained from the lender. The term “borrower” is used interchangeablywith the term “debtor” and the term “lender” is used interchangeablywith the term “creditor.”

If the debtor fails to perform any of the debtor's obligations under theterms and conditions of the loan agreement, the debtor is in default. Inthe case of a mortgage loan, a typical default arises if the debtorfails to pay the monthly mortgage payment due under the loan agreement.Upon default, and so long as the creditor follows debt collectionprocedures per the terms of the mortgage document and complies withfederal and state laws, the creditor can cause the property securing theloan agreement to be sold at a foreclosure sale. Since foreclosure is aharsh remedy to be resorted to only under the direst circumstances,failure to comply with even the most minute federal or state consumerprotection, debt collection, property, title and business statutesrelated to the enforcement of security interest can result in a wrongfulforeclosure or class action lawsuit with negative economic consequencesfor the lender.

Because of the legal issues involved with enforcing a loan agreement,most creditors retain a loan servicer to be their duly authorized agentor representative to handle the day to day loan level administrativedetails related to a loan. When a loan goes into default the loanservicer, as the creditor's representative, initiates a debt collectionprocess. Depending on the creditor and/or the extent of the default,legal counsel is retained to continue the debt collection.

At any time during the life of the loan, the debtor may file bankruptcy,which forces the creditor to (a) cease any collection activities,including a foreclosure proceeding, repossession or otherwise suffersevere economic sanctions from the bankruptcy court, and (b) requiresthe creditor to deal with the debtor's default under the auspices of thebankruptcy court and the federal bankruptcy code. If the creditor seeksto enforce its loan instrument or security agreement that is in default,the creditor must timely file a proof of claim (“POC”), also referred toas “claim”, in the bankruptcy court.

In a typical bankruptcy, there may be several creditors involved for asingle debtor in bankruptcy, wherein each creditor may file one or moreclaims against the debtor. The court appoints a trustee to manage theclaims against the debtor. The trustee collects payments from the debtorand distributes the payments to the creditors in order to satisfy theclaims against a loan, according to the bankruptcy plan confirmed by thebankruptcy court. There are approximately 200 trustees nationwide thatcollect and distribute debtor payments to satisfy bankruptcy claimsfiled by creditors in approximately 284 bankruptcy courts.

Since the trustees are responsible for managing the claims, they arerequired to ensure that their books and records related to the claimsare properly maintained. The trustees ensure that payments made to thetrustee by the debtors are properly distributed to the correct creditorsas confirmed by the court.

The loan servicer, on behalf of the creditor, tracks and maintains theloan and claims during the term of a bankruptcy. The loan servicerensures that payments received from the trustee and from the debtor areproperly applied to the correct loan and associated claim, and that thebooks and records reflect the correct state of payments.

In order to properly service the claims, the loan servicer must matchthe claims to one or more specific loans. Since there is no commonidentifier for matching a claim to a loan, the process of matching canbe labor intensive.

During the term of the bankruptcy, the trustee sends a payment to thecreditor by a check (sometimes via ACH). The trustee typically enclosesa payment voucher with the check. The payment voucher providesinformation about the payment, including bankruptcy case number andclaim number, and sometimes includes the debtor name and correspondingaccount/loan number. The loan servicer is required to apply the paymentsto the debtor's loan in accordance with the bankruptcy court-confirmedplan.

In order to apply the payments to the debtor's account, the voucher andthe check must be matched to the correct claim(s) and the correspondingloan(s). Unfortunately, the matching process is complicated because theclaims may be related to different loan parts: a pre-petition payment, apost-petition on-going payment, an agreed order payment or an intereston arrears payment.

Also, the trustees are not required to adhere to a defined standard forvoucher details nor are they required to apply common businessdefinitions, (e.g. they often do not provide enough detailed informationdelineating the amounts for each loan and each claim), making theinterpretation of the voucher detail difficult for the loan servicer toapply the correct amounts to the correct claim(s) and associatedloan(s).

After the check is matched with the correct claim(s) and thecorresponding loan(s) are identified, the payment must be appliedaccording to the court-confirmed plan (e.g., payments applied to thecorrect loan part: pre-petition mortgage payments, court allowed feesand costs, interest on arrears, post petition on-going payments, etc).As will be apparent to those skilled in bankruptcy matters, the paymentapplication in accordance with the court-confirmed plan may be quitedifferent from how payments for a loan are typically applied such asbeing applied to the payments for the contractual amount due on the loanand any outstanding fees or costs associated with the loan Generalaccounting methods are utilized by loan servicing systems. For example,each pay period, usually monthly for a mortgage loan, the next paymentis due per the loan contract. Loan servicing systems typically do notallow for multiple concurrent contractual due dates as often requiredfor the duration of the bankruptcy (which can be up to five years) wherea loan is in default at any time at bankruptcy filing or a subsequentdefault during the bankruptcy. Some loan servicing systems have beenmodified to attempt to allow recordation and application of multipleloan parts which are concurrent due dates required during a bankruptcy,i.e., pre-petition arrearage due date, post petition on-going due date,post petition arrearage/agreed order due, or a possible additionalagreed order due date.

The loan servicer must maintain distinct comprehensive records ofpayments as a result of possible delinquencies at the time of thebankruptcy filing (i.e., pre-petition arrearages) and payments due afterthe bankruptcy filing date (i.e., post petition on-going payments).Generally, the post-petition payments are considered current as of thefirst month after the filing of bankruptcy and the payments must beapplied as if they were, even though a loan servicer's system may showthe post-petition payments to be contractually delinquent. Once abankruptcy is filed, the debtor is deemed to be current on his payments(monthly mortgage payment as an example) effective with the monthfollowing the bankruptcy petition date. The entire delinquency existingon the loan at the time of the bankruptcy petition filing is put into alump sum and called the pre-petition arrearage. The amount is put into arepayment plan as confirmed by the bankruptcy court and administered bythe trustee. The pre-petition arrearage is usually spread out in smallerpayments through the life of the bankruptcy, up to five years. The loanservicer must keep track of these pre-petition payments and apply them,as they are received from the trustee, towards the monthly payments,fees and costs that were due at the time of the petition filing per theconfirmed plan. In addition, the now “current” post petition on-goingmortgage payment (in this example) are coming in as well from either thedebtor directly or from the trustee in some jurisdictions. Thesepayments must be applied to the debtor's account as current payments andreflected as such on the loan servicer's system and subsequent reportingmechanisms. This is true also for any additional delinquency that occurswith the post petition on-going payments in the form of a court orderedagreed order after the petition filing. The loan servicer's system mustkeep track of this third payment and its due date as well. Sanctions andpenalties may be assessed by the bankruptcy court for failure to do soproperly.

In most jurisdictions, the debtor makes post-petition “current” on-goingloan payments directly to the creditor, not to the trustee, but thedebtor makes pre-petition payments to the trustee who is responsible formanaging the pre-petition arrearages. However, in some jurisdictions,the trustee manages both pre-petition arrearages and post petitionpayments, as well as some post petition agreed order payments. In thosejurisdictions where the trustee exercises control over both thepre-petition and post-petition payments, the trustee and the loanservicer must keep track of both pre-petition and post-petition paymentsand the loan servicer must identify and apply these payments inaccordance with the court confirmed plan.

Further difficulties arise because, in the case of most mortgage loans,post petition on-going monthly payment amounts often change dependingon, for example, escrow analysis or adjustable rate mortgages. If themonthly on-going payment amount changes, the trustee needs to adjustaccordingly and remit the correct amount to satisfy the terms of themortgage according to the contract between the debtor and the creditor.Some loans, as in the case of many mortgage loans, per the mortgagecontract include in the monthly payment principal, interest and escrowpayments for property taxes on the collateral home, as well as homeinsurance, mortgage insurance premiums, etc. Because property taxes andhome owners insurance are usually subject to change each year, thecontract allows for an analysis of the escrowed amount, it is usuallydone annually. Depending on the outcome of the escrow analysis, themonthly escrowed amount may stay the same, increase or decrease. Theon-going monthly mortgage payment must change accordingly so as not tocause a gross overage or shortage in the debtor's escrow account.Similarly, adjustable rate mortgages, per the contract, allow forchanges in the interest rate for certain periods of the life of theloan, causing the total monthly on-going payment to change depending onthe new interest rate, usually annually. The change in the requiredremittance amount of the post petition on-going payment, if beingadministered by the trustee may result in problems and somejurisdictions require a court order to make any change to this amount asit changes the court confirmed plan.

Often during the bankruptcy period, disputes arise whether the debtorhas made certain payments and/or whether the payments were actuallyapplied to the correct claims or loan part: pre-petition, post petitionor agreed order. At court hearings to resolve such disputes, bankruptcyjudges and trustees often require reports showing accurate status of thepayments and the claims. However, due to the foregoing problems,accurate reports of the status of the payments and the claims are oftendifficult to create.

There exist a need for a system and a method that provide a solution forthe foregoing problems. There exists a need for a system and method thatassists creditors and loan servicers to efficiently manage bankruptcyrelated loan payments and claims.

SUMMARY

A system and method provides electronic management and processing ofbankruptcy-related claims and payments. The method includes receivingloan servicer data from a loan servicer portfolio. The loan servicerdata relates to one or more loans (e.g., mortgage loans, automobileloans, credit card loans) whose debtors are in bankruptcy and alsorelates to one or more claims filed by creditors against the debtors.The method also includes receiving trustee data from a repository oftrustee information. The trustee data relates to the loans whose debtorsare in bankruptcy and also relates to the claims filed by the creditors.The method includes comparing one or more data fields related to theclaims from the service provider data to corresponding one or more datafields related to the claims from the trustee data and assigning a scoreto the comparison results for the data fields related to the claimsbased on one or more business rules. The method includes calculating thetotal score for the comparison results for the claims, designating theclaim as being valid if the total score for the claim is greater orequal to a predetermined value, and designating the claim as beinginvalid if the total score for the claim is less than a predeterminedvalue. The method includes identifying one or more claims filed againstthe debtor for a particular loan based on the results of the comparison.The method further includes generating payment instructions for thevalid claims and providing the payment instructions to the loanservicer.

BRIEF DESCRIPTION OF THE DRAWINGS

The following detailed description of embodiments of the invention willbe better understood when read in conjunction with the appendeddrawings. It should be understood, however, that the invention is notlimited to the precise arrangements and instrumentalities shown herein.In the drawings, like reference numerals designate corresponding partsthroughout the several views.

The present invention may take physical form in certain parts andarrangement of parts. For a more complete understanding of the presentinvention, and the advantages thereof, reference is now made to thefollowing descriptions taken in conjunction with the accompanyingdrawings, in which:

FIG. 1 is a flow diagram of the steps for electronic management andprocessing of bankruptcy-related claims and payments in accordance withone example embodiment.

FIG. 2 is a flow diagram of several additional steps for electronicmanagement and processing of bankruptcy-related claims and payments inaccordance with one example embodiment.

FIG. 3 is yet another flow diagram of several additional steps forelectronic management and processing of bankruptcy-related claims inaccordance with one example embodiment.

FIG. 4 illustrates a data processing system for electronic managementand processing of bankruptcy related claims and payments in accordancewith one embodiment.

DETAILED DESCRIPTION

It should be understood that any one of the features of the inventionmay be used separately or in combination with other features. It shouldbe understood that features which have not been mentioned herein may beused in combination with one or more of the features mentioned herein.Other systems, methods, features, and advantages of the presentinvention will be or become apparent to one with skill in the art uponexamination of the drawings and detailed description. These and otherobjects, features and advantages of the present invention will be morereadily apparent when considered in connection with the following,detailed description of embodiments of the invention, which descriptionis presented in conjunction with annexed drawings below.

The embodiments of the invention are described in connection with asystem and method for management of bankruptcy-related loans, claims andpayments. It will become obvious to those skilled in the art that theembodiments of the invention can be adapted or modified to process othertypes of claims and payments.

In one aspect, a system and method provides electronic management ofbankruptcy-related claims and payments. The system maintains updatedtrustee claim and disbursement information, debtor payment or remittanceinformation, and running total of claim balances on a regular basis. Thesystem assists a creditor, a loan servicer and others to identify claimsand trustee payments, track and maintain records related to payments andclaims. The system and method also generates reports to assist a courtor the trustee to resolve disputes related to the debtor payments andthe claim balances.

In one aspect, the system automates, maintains and reconciles paymentswith one or more claims against a debtor. As will be understood by thoseskilled in the art, the payments are sent by the debtor to the trustee,and the trustee then forwards the payments to the loan servicer. Theloan servicer applies the payments against one or more loans and one ormore claims against the debtor. The system ensures that payments made bythe debtor through the trustee during the course of the bankruptcy areidentified and posting instructions are supplied to the creditor or loanservicer to allow for proper allocation to the appropriate pre-petitionand post-petition accounts. In one embodiment, the pre-petition accountsand the post-petition accounts are reconciled with the loan servicer andthe trustee records. The system generates a record of payment historyassociated with the claims payments. For example, a standardized,on-demand payment history report and reconciliation is created forpresentation to the court and trustee.

In one embodiment, the system is connected to a loan servicer's computernetwork through a communications network such as the Internet. Thesystem receives loan servicer data from a loan servicer portfolio. Inone embodiment, the system receives an updated copy of the loanservicer's bankruptcy portfolio periodically, e.g., daily.

Because of the highly confidential nature of the data received from theloan servicer's portfolio, the system maintains a very high level ofsecurity during data transmission and data storage.

The loan servicer's bankruptcy portfolio includes loans in activebankruptcy status that are serviced by that loan servicer. As will beunderstood by those skilled in the art, a loan servicer's portfolioincludes loans of varying size and makeup. A loan servicer, for example,might service, for example, a total of 100,000 loans out of which 3,300may be in active bankruptcy proceedings. As will be understood by thoseskilled in the art, a loan servicer's portfolio includes loans invarious statuses such as current, delinquent, in foreclosure, currentbankruptcies. The loan servicer's portfolio might include differentcollateral types of loans, such as mortgages (conventional, FHA, VA,first lien, second lien), auto, secured, and unsecured loans. The loanservicer's portfolio might be comprised of loans in one particularstate, e.g., Texas, or the portfolio might be comprised of loans madenationwide.

The loan servicer generally maintains an electronic file for a loan orborrower that is in active bankruptcy. The file includes data related tothe loan and the corresponding claims as defined in a POC. For example,the file includes the loan number, the borrower's name, the borrower'ssocial security number, the bankruptcy case number, and the trusteename, among other data fields. The system automatically receives thedata from the loan servicer's file. In one embodiment, the systemdownloads the data from the loan servicer's file into a server. The dataelements in the files are mapped at implementation of the initialconversion of loans when a servicer comes on to the system for the firsttime. Data elements, sometimes called data fields, from the servicer'ssystem (that contain the information needed to compare with thetrustee's information to determine which loans and claims are a match)must be mapped or linked to the data fields in the system.Determinations need to be made to ensure that both systems areinterpreting the same information. When the servicer sends data, thesystem needs to interpret the data as it was intended.

In one embodiment, the system receives specific loan details from theloan servicer's portfolio, which are relevant to claims matching.Specifically, the system receives the POC (also referred to as the“claim”) related information from the loan servicer's portfolio. The POCis a document filed by a creditor in a bankruptcy case. The POCidentifies the debtor, lists the debt owed by the debtor to the creditorat the time of the filing of the bankruptcy petition, and provides thedocuments evidencing the debt. The debt is referred to as thepre-petition debt, and the claim is referred to as the pre-petitionclaim. The creditor files the POC in a bankruptcy court and provides acopy of the POC to the trustee.

The system reviews the claim and loan related information received fromthe loan servicer and the information related to the claim received fromthe trustee through a commercially available database in order to matchthe loan to one or more claims filed against the loan. Specifically, thesystem reviews the debtor's name, the creditor names, loan number,trustee name, claim amount, balance of claim remaining, type of claimand other related information in the POC. Based on the review, thesystem identifies one or more claims filed against a particular loan.

The system electronically receives trustee data relating to claims andloans that are in the loan servicer's portfolio from a commerciallyavailable database. Specifically, the system uploads the trusteeinformation from a database of the National Data Center (NDC). As willbe understood by those skilled in the art, NDC is a repository oftrustee data. NDC has agreements with the majority of the chapter 13trustees in the U.S. that have jurisdiction over 95% of all bankruptcyclaims nationwide. NDC receives daily updates online from the trusteeswith data related to each of the debtors over whom they havejurisdiction for the collection and distribution of the debtor funds.The NDC stores the trustee data in NDC's database. NDC standardizes theformat of the stored data elements of the trustee information for easierdownload and viewing of the information online.

As will be understood by those skilled in the art, the trustee maintainselectronic files containing records of the claims that are administeredby the trustee. These claims are filed by the creditors against thedebtors in bankruptcy. Typically, NDC receives a daily update of theelectronic files from the trustee. The electronic file updates providetrustee disbursement information, debtor remittance to trusteeinformation, running total of claim balances, etc.

The system receives updated trustee disbursement information, borrowerremittance information and running total of claim balances from NDCdaily. As discussed before, the debtor remits payments to the trustee asdetermined by a court confirmed bankruptcy plan. The trustee, in turn,disburses the available debtor funds to the debtor's creditors inaccordance with the confirmed plan. The trustee keeps a record of debtorremittance, disbursement of funds and the running total of claimbalances. This information is electronically transmitted to NDCregularly and stored in NDC database.

The system matches data received from NDC with the data received fromthe loan servicer. The system uses weighted business rules to match thedata. In one embodiment, the system compares the contents of a datafield from NDC's record to the corresponding data field in the loanservicer's record to determine if the values match. As discussed before,the loan servicer's record includes the POC related information. Thesystem assigns point values to the comparison rules depending on theimportance of the data field. In other words, the point values assignedto the comparison rules vary depending on the data field. In oneembodiment, the assigned score for the comparison is high if the datafield is designated as having high importance, i.e. loan number. Incontrast, the assigned score for the comparison is low if the data fieldis designated as having low importance.

In one embodiment, the assigned point value to a particular comparisonrule may change depending on the loan servicer and the importance aparticular loan servicer places on a particular data element (e.g., aparticular loan servicer may not use certain data fields).

The data elements of the NDC records from the trustee are compared withthe corresponding data elements of loan servicer's loan and claiminformation to determine if the data elements match. For example, if theaccount number or loan number of NDC's record matches exactly with theaccount number or loan number of the loan servicer's, a high point valueis assigned. If the account number is redacted and only the last fourdigits are available and they match, a slightly lower point valued isassigned. If the last name of the debtor matches, the assigned pointvalue is not as high because many debtors may have aliases when filing abankruptcy petition, or a co-debtor may have filed.

One example of a weighted business rule: the loan number listed on theproof of claim on the NDC file should match the loan number listed inthe loan servicer's file. If the loan numbers match, higher points areawarded than if only the last four digits of the loan numbers match.

Another example of the weighted business rule: the account number listedon the proof of claim on the NDC file should match the account numberlisted in the loan servicer's file. If the account numbers matchcompletely, 200 points might be assigned. If only the last four digitsof the account numbers match, only 80 points might be awarded. If nonumbers match, 0 points might be awarded regarding account number.

The system calculates the sum total of the points awarded to aparticular claim. If the sum total of the points awarded is greater orequal to a predetermined value, the claim is considered matched, and theclaim is designated as being valid. If the sum total of the pointsawarded is less than the predetermined value, the claim is consideredunmatched, and the claim is designated as being invalid.

In one embodiment, the system identifies certain claims for userexception review. If a claim, for example, is a possible match but istechnically unmatched due to a low sum total score, that claim will beincluded in a list of claims for an exception review by a user. Forexample, an exception may be triggered for review as unmatched becausethe loan number did not match, but the creditor's name and a securedmortgage loan matched. The system allows the user to review the claimsto determine if the claims are valid based on the information in theloan servicer's portfolio. If the user review indicates that the claimis valid, the user can note on the exception queue of the systemmanually to indicate that the match is correct and enter the claim inthe system as being valid. If the match is not valid, the indication ismade in the system.

After matching the NDC records with the loan servicer's records, thesystem identifies the matched claims and generates posting instructionsfor the payments that are remitted by the trustee. The postinginstructions provide correct payment disbursement instructions to theloan servicer for the particular trustee payment received. The systemcompares the amount due on a claim per the confirmed plan and theremaining amount due on. The loan servicer does not have to spend timein order to determine correct disbursement amounts for one or moreclaims against the debtor.

Creditors sometimes amend the claims during the bankruptcy period. Thereare various reasons for amending a claim during the bankruptcy period.For example, a court entered agreed order conditioning a stay, or addingan additional post-petition debt to the plan may require an amendment.Also, an error discovered on the original pre-petition claim filed mayrequire an amendment. Also, delinquent taxes paid after the bankruptcyfiling, but are for taxes that were due prior to the bankruptcy, makingthem a pre-petition debt may require an amendment.

In one embodiment, the system provides updates for amended claims. Ascreditors submit amended claims to the court, they are in turn submittedto the designated trustee. The trustee enters the pertinent informationfrom the amended claim into their system. The updated trusteeinformation is provided to the NDC, which is subsequently transmitted tothe system. Submission of the amended claim is also made by the loanservicer to the system via the daily file. As the amended claim isfiled, the loan servicer updates their system with this information.This is in turn downloaded to the system as a daily change to a file.

In one embodiment, the system updates active and inactive cases. Activecases are bankruptcy cases where the debtor is still under theprotection of the bankruptcy and over which the trustee still hasjurisdiction for collection and distribution of debtor payments.Inactive cases are bankruptcy cases where the trustee no longer hasjurisdiction for the collection and distribution of the debtor fundsbecause the debtor was discharged or a new trustee was assigned to thecase by the court. In the case of a reassigned trustee, information fromthe new trustee would be fed to the NDC and the case would be active.

In one embodiment, the system identifies the discrepancies between thedata fields in the NDC record and the loan servicer record. The systemsends notifications to the trustee and the loan servicer about thediscrepancies. For example, if the system determines through comparisonof the loan servicer's data and the NDC's data that the loan servicerhas an incorrect bankruptcy case number, an exception queue is generatedto notify the loan servicer of the anomaly. If the system determinesthrough comparison of the servicer's data and the NDC's data that thetrustee is remitting to the servicer payment amounts that are notcorrect for post petition on-going monthly payments, the trustee will benotified of the error and will be advised of the correct remittanceamount.

FIG. 1 is a flow diagram of the steps for electronic management andprocessing of bankruptcy-related claims in accordance with one exampleembodiment. In step 104, loan servicer data is received from the loanservicer portfolio. The loan servicer data relates to one or more loansin bankruptcy and one or more claims filed by creditors against thedebtors.

In step 108, trustee data is received from a repository of trusteeinformation. The trustee data relates to the servicer's loans inbankruptcy and relates to the claims filed by the creditors. In step112, one or more data fields related to the claims from the loanservicer data are compared to corresponding one or more data fieldsrelated to the claims from the trustee data.

FIG. 2 is a flow diagram of several additional steps for electronicmanagement and processing of bankruptcy-related claims in accordancewith one example embodiment. In step 204, loan servicer data for amendedclaims filed by the creditor is received from the loan servicerportfolio. The loan servicer data relates to one or more loans inbankruptcy and one or more amended claims filed by creditors against thedebtors.

In step 208, trustee data is received from a repository of trusteeinformation. The trustee data relates to servicer's loans in bankruptcyand related to the amended claims filed by the creditors. In step 212,one or more data fields related to the amended claims from the loanservicer data are compared to corresponding one or more data fieldsrelated to the amended claims from the trustee data.

FIG. 3 is a flow diagram of several additional steps for electronicmanagement and processing of bankruptcy-related claims in accordancewith one example embodiment. In step 304, a score is assigned to thecomparison results for the data fields related to the claims based onone or more business rules. In step 308, the total score is calculatedfor the comparison results for the claims. In step 312, if the totalscore for the claim is greater or equal to a predetermined value, theparticular claim is designated as a valid claim. Otherwise theparticular claim is designated as an invalid claim. In step 316, one ormore invalid claims are identified for exception review. The claimsselected for exception review achieved a low score but are a possiblematch.

FIG. 4 illustrates a data processing system 400 for electronicmanagement and processing of bankruptcy related claims and payments inaccordance with one embodiment. The system 400 includes a databaseserver 404 that includes a processor 406. The database server 404contains records of users and their access rights, such as those personsqualified to use the data processing system 400. The database server 404also contains trustee data received from a trustee repository such asNDC. The trustee data includes debtor names, debtor social securitynumbers, claim balances, trustee names, claim numbers, etc.

The database server 404 also contains records received from the loanservicer database or portfolio. The loan servicer portfolio includesdebtor names, debtor social security numbers, claim balances, creditornames, trustee names, etc. As discussed before, the data fields for aclaim from the trustee data is compared to the corresponding data fieldsfor the claim from the loan servicer data to identity one or more claimsfor a particular loan. When one or more claims are matched with a claim,the claims are designated as being valid. Otherwise, the claims aredesignated as being invalid or are queued for exception review.

The system 400 also includes an Information Technology (IT) Network 408,which includes network infrastructure required to maintain communicationamong the various components of the system 400 and the trusteedepository 430 and the loan servicer database 434. The IT-Network 408may include computers, printers, scanners, and document processingequipment required for automatically processing and generating documentsrelated to the POCs, loans, debtors, creditors, and other bankruptcyrelated matters.

The system 400 also includes external interfaces 420, which areoperative to interface with external entities, such as clients of a lawfirm, courts, financial institutions, government offices, as well asbilling and archiving systems. The external interfaces 420 may allow forinterfacing to external systems to be performed manually, with the helpof data processing software, via Internet websites, or fullyautomatically with the use of 3rd party middleware software packages. Inone particular example, through messaging and notification via externalinterfaces 420, the system 400 may respond to events that occur in abankruptcy proceeding such as, for example, filing an amended claim bycreditor.

As will be appreciated, the system 400 represents an architectureplatform that is operative for enabling users to work in a paperlessmanner. The external interfaces 420 include modules for interfacing withexternal entities to enable document transfer. In one embodiment, theinvention includes connectivity tools for interfacing through clientmiddleware packages to provide information that triggers exceptionqueues that can be downloaded through commercial middleware packages.

Although the present invention and its advantages have been described indetail, it should be understood that various changes, substitutions andalterations can be made herein without departing from the spirit andscope of the invention as defined by the appended claims. For example,while the invention has been described in relation to managing andprocessing bankruptcy related claims, it will become apparent to thoseskilled in the art that the invention can be adapted or altered tomanage and process claims and case files related to other proceedings.

1. A method for payment allocation and processing of bankruptcy claims,comprising: receiving, by a computer, loan servicer data from a loanservicer, the loan servicer data relating to one or more loans,including bankruptcy plan information, whose debtors are in bankruptcyand one or more claims filed by creditors against the debtors; receivingtrustee data from a repository of trustee information, the trustee datarelating to the loans whose debtors are in bankruptcy and the claimsfiled by the creditors; matching loan servicer data with trustee data toidentify matched claims from the loan servicer and the trustee; and foreach of the matched claims, providing correct payment disbursementinstructions to the loan servicer for payments that are remitted by thetrustee; wherein the matching of servicer and trustee data comprisescomparing one or more data fields related to the claims from the loanservicer data to corresponding one or more data fields related to theclaims from the trustee data, assigning a score to the comparison, andverifying a match when the score is above a predetermined value.
 2. Themethod according to claim 1, wherein assigning the score to thecomparison results is based on one or more business rules, wherein theassigned score for the comparison results is weighted depending on thedata fields related to the claims.
 3. The method of claim 1, whereinproviding correct payment disbursement instructions to the loan servicerfurther comprises comparing an amount due on a claim per a confirmedplan to an amount remaining due.
 4. A method for reconciliationreporting and processing of bankruptcy claims, comprising: receiving, bya computer, loan servicer data from a loan servicer, the loan servicerdata relating to one or more loans, including bankruptcy planinformation, whose debtors are in bankruptcy and one or more claimsfiled by creditors against the debtors; receiving trustee data from arepository of trustee information, the trustee data relating to theloans whose debtors are in bankruptcy and the claims filed by thecreditors; matching loan servicer data with trustee data to identifymatched claims from the loan servicer and the trustee; and for each ofthe matched claims, sending notification to one of the trustee and tothe loan servicer regarding any discrepancies identified between datafields in the loan servicer data and corresponding data fields in thetrustee data; wherein the matching of servicer and trustee datacomprises comparing one or more data fields related to the claims fromthe loan servicer data to corresponding one or more data fields relatedto the claims from the trustee data, assigning a score to thecomparison, and verifying a match when the score is above apredetermined value.
 5. The method according to claim 4, whereinassigning the score to the comparison results is based on one or morebusiness rules, wherein the assigned score for the comparison results isweighted depending on the data fields related to the claims.
 6. Themethod of claim 4, further comprising providing notification to the loanservicer when a comparison of the loan servicer data and the trusteedata indicates the loan servicer has an incorrect bankruptcy number. 7.The method of claim 4, further comprising providing notification to thetrustee when a comparison of the loan servicer data and the trustee dataindicates the trustee has remitted payment amounts that are not correct.8. The method of claim 4, further comprising providing an externalinterface for providing the notification to one of the trustee and tothe loan servicer.
 9. A computer-readable non-transitory storage mediumincluding instructions for controlling a computer system to perform amethod for payment allocation and processing of bankruptcy claims,comprising the steps of: receiving loan servicer data from a loanservicer, the loan servicer data relating to one or more loans whosedebtors are in bankruptcy and one or more claims filed by creditorsagainst the debtors; receiving trustee data from a commerciallyavailable repository of trustee information, the trustee data relatingto the loans whose debtors are in bankruptcy and the claims filed by thecreditors; matching loan servicer data with trustee data to identifymatched claims from the loan servicer and the trustee; and for each ofthe matched claims, providing correct payment disbursement instructionsto the loan servicer for payments that are remitted by the trustee;wherein the matching of servicer and trustee data comprises comparingone or more data fields related to the claims from the loan servicerdata to corresponding one or more data fields related to the claims fromthe trustee data, assigning a score to the comparison, and verifying amatch when the score is above a predetermined value.
 10. Thecomputer-readable non-transitory storage medium of claim 9, whereinassigning the score to the comparison results is based on one or morebusiness rules, wherein the assigned score for the comparison results isweighted depending on the data fields related to the claims.
 11. Thecomputer-readable non-transitory storage medium of claim 9, whereinproviding correct payment disbursement instructions to the loan servicerfurther comprises comparing an amount due on a claim per a confirmedplan to an amount remaining due.